Ask the Lawyer received the following question (paraphrased for easier reading and clarity) from a reader on a legal matter that might be of interest to the entire audience.
Q:
I am eligible to retire but my agency says I owe the government $60,000 because I left federal service several times years ago and took out my retirement accumulation. No one ever told me I’d have to pay the money back if I returned to federal service. Is it legal for them to charge me money plus interest over the years that I was working in the private sector?
A:
You have no choice but to receive an interim payment if you seek to retire. The Office of Personnel Management has improved its process on this recently. Yes, you have to repay your paid contribution if you want credit for prior service and took out your contributions. You are perfectly free to retire, not repay for prior service and not receive credit. In fact, if you are Federal Employees Retirement System (FERS) the ability to repay and receive prior credit only recently occurred. Under previous law, FERS employees who withdrew their contributions could not receive credit for service under any circumstance.
Bill Bransford is managing partner of Shaw, Bransford & Roth, PC.
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